In an Internet-driven World, Is the Access to Digital Entertainment Truly Global?

Facebook, Youtube, Netflix, Spotify – how many of these apps do you have installed on your smartphone? One or two at the very least, most likely. It’s hard to imagine someone as precluded from streaming movies from Netflix or following Youtube channels simply because the Internet is not fast enough – or if they don’t have access to Internet at all. However, that’s the reality – in some regions these services are a luxury that people can’t afford. So, what is the current status of the Internet around the world and how does it affect digital entertainment consumption? And, more importantly, what can be done to improve the situation?

We would like to thank the team at BOLT for their contributions to the design and implementation of the research and to the analysis of the result.

Internet penetration is growing, although there is still room for improvement

In the beginning of 2018, a new report on Internet penetration (the share of the population using Internet) was released by Hootsuite, a social media management platform with more than 15 million users in over 175 countries, and We Are Social, a global conversation agency whose clients include Netflix, Google, Mastercard, and others. According to this report, over half of the population globally is now online, and nearly 250 million new users started to use Internet in 2017 alone. The fastest growth rates were observed in Africa, where the number of Internet users increased 20% last year. Still, emerging markets (which are growing rapidly to become more important in the world economy) and developing countries (with slower economies than that of emerging ones) are left behind – for example, Internet penetration in Middle Africa stays at an unbelievably low level of 12%.

Mobile Internet is another story – two-thirds of the world’s population has a mobile phone, and 200 million people got one for the first time in 2017. According to the last GSMA report on mobile connectivity, the infrastructure for mobile Internet has progressed – 3G coverage has increased to 87% by 2018 with 1.1 billion more people covered last year. 4G is also progressing – in most emerging countries, users can access it more than 60% of the time. In Africa, at least 43 out of 55 countries are expected to have commercial 4G services offered by the end of 2018. The problem remains, however, in rural and remote areas, as only a third of the population in low-income countries have Internet access.

Although Internet is here for us, digital entertainment doesn’t even come close

The progress in Internet penetration around the world is remarkable, but it’s misleading when it comes to digital entertainment services. Unfortunately, they do not go hand-in-hand with Internet connection – and there are three main reasons for this.

In emerging markets, Internet speeds are not sufficient enough.

Good news: the average mobile connection speed has increased by over 30% during the past year. The average smartphone user now consumes around 3GB of data every month, which is a 50% increase from 2017.

Bad news – the difference is substantial among regions. Norway is at the top of the list with average download speeds of more than 60 Mbps, which is almost three times the global average. Other countries with amazing mobile speed connections include Malta, Netherlands, Singapore, the UAE, and Iceland (over 50 Mbps). On the other hand, some countries have not even reached a speed of 5 Mbps – those include Iraq and Libya – while others are struggling to pass 10 Mbps – including Ukraine, Venezuela, Algeria, India, and Indonesia.

The difference between region holds when we talk about broadband connectivity as a whole (both fixed and mobile) – for instance, in Singapore the average download speed is almost 61 Mbps, which means you can download a typical HD 5GB movie in just 11 minutes. Compare it to Brazil, where the speed is 23 times lower! There, you’ll have to wait for 4 and a half hours for the same movie to be downloaded – and it’s still not as bad as in Egypt, where this timespan will increase to more than 8 hours.

However, it’s not only about speed – cost is another problem.

Slow doesn’t mean cheap – global disparities in cost of connection.

This report by BDRC Continental and Cable.co.uk shows that the disparities in the cost of getting online are impressively vast. For example, Iran offers the world’s cheapest broadband, with an average monthly cost of $5.37. At the same time, Burkina Faso, where the connection speed is just 0.84 Mbps, is the most expensive – its average package price of broadband connection is $954.54 per month!

The important thing here is not only the cost itself, but also its share of a person’s income. As Gour Lentell, CEO of biNu, explains in his analysis of a research project on low-income, first-time smartphone users in Kenya: “Since modern smartphone apps use a lot of data, people do whatever they can to avoid spending money unnecessarily.” Research participants had a daily income of Ksh 500, or $5 – this is the cost of 1GB of data, a dinner for five, or weekly rent.

Africa is not the only region that has to face a trade off between Internet connection and basic human needs. Alyssa Maharani, the Launchpad Accelerator Startup Success Manager at Google, says: “In my personal experience, I know that in Indonesia and Philippines that people go as far to rely on multiple SIM cards to game the system and get cheaper data plans. My mom, who lives in Indonesia, goes as far to not subscribe to a mobile data plan and only use public Wi-Fi for one of her phones to save money on data.”

However, even those who have enough money to pay for entertainment services like Netflix may get stuck with the inability to do so, simply due to the lack of having a bank account.

Digital payment systems may become an obstacle for the unbanked.

Access to digital entertainment services like Netflix and Spotify Premium is not free. These providers rely on credit or debit cards and sometimes PayPal for customers to pay with. For most of us, the payment process itself is not a big problem – but what about the 1.6 billion adults all over the worldthat are still unbanked, including those 1.2 billion living in emerging and developing countries?

For the unbanked, the number of payment options is very limited – these are mostly cash, checks, or prepaid cards. According to the World Bank, more than 200 million unbanked adults who work in the private sector are paid in cash only, as are more than 200 million who receive agricultural payments. In Sub-Saharan Africa, for example, up to 95 million unbanked adults receive cash for agricultural goods, while in the Middle East and North Africa, up to 20 million send or receive domestic remittances using cash or an over-the-counter service, including 7 million in Egypt.

Cash is the most obvious choice for the unbanked as they don’t have to pay cash-loading, ATM withdrawal fees, transaction fees, or cash-checking fees when using checks. Unfortunately, digital entertainment providers are not able to accept cash yet. It’s not surprising that the unbanked are likely to miss the benefits of digital entertainment, they simply don’t have means to pay for it.

Facebook is an absolute leader among social networks – it has over 2 billion monthly active users (MAUs), which equates to more than a quarter of the world’s population. Unexpectedly, just 239 million of Facebook’s MAUs live in the US or Canada, while there are 364 million of them in Europe, 794 million in Asia-Pacific, and 675 million in the rest of the world.

Even though Facebook’s global presence is unchallenged, what also matters is the share of the population using the network among regions. Internet world stats shows that North Africa is leading with over 70% of the population using Facebook, while Asia and Africa are left behind with less than 20% penetration. People in some countries are banned from using Facebook – these include China, where WeChat and Weibo are leading (900 million users daily and 340 MAUs respectively).

Other emerging markets still have a long way to go. According to the recent MIDIA research, India has a large numbers of free users, but a tiny paid base, while Russia and the Middle East both have a solid ratio of free-to-paid users. Africa has the lowest per capita metrics for both paid and free. The reason for this is likely due to mobile data network availability and affordability – “in most sub-Saharan African countries coverage is patchy and expensive,” the report states.

Netflix and video on demand.

Video on demand is the next big topic in the list of digital entertainment services. A huge success on the market is Netflix with $150 billionmarket capitalization and 130 million subscribers around the world. Despite its global coverage, Netflix penetration differs a lot among countries. In the United States, for example, 64.5% of the population uses the service. The UK, the last on the list, goes with just 34% of the population.

As it has already been said, it’s not just about cost – speed and data usage are what also matter. Don Reisinger, a longtime freelance technology journalist and product reviewer, explains, “Netflix says you need 5 Mbps to stream HD content and 25 Mbps for 4K Ultra HD content, but you’ll want faster speeds if you plan to connect several devices at once” – and these speeds are simply inaccessible in some regions. In addition, watching movies on Netflix uses about 1GB of data per hour for each stream of standard definition video, and up to 3GB per hour for each stream of HD video.

Quite high prices and streaming requirements of Netflix resulted in the establishment of a similar service targeting emerging markets – Malaysia-based IFlix. The average speed required to use the service is just about 650 kbps, which allows users to stream on a 3G connection. IFlix also charges just $3 to $5 per month, which is significantly lower than Netflix rates. What also makes this service interesting is that it has partnered with local telcos and banks for users to pay from prepaid mobile phone balances and bundle data deals from their provider.

As we can see, users in emerging countries are mostly restricted from enjoying digital entertainment services for a number of reasons, which include connection speed, connection cost, and lack of access to banking services. What can be done with that?

Blockchain for making digital entertainment affordable

The possible answer to all the three problems listed is the blockchain. According to Varun Satyam, CBO Almora.io, innovation strategist, and blockchain advisor, “In order to ensure more equal development of the global Internet network, an innovative and technically valuable solution is crucially needed. And it is actually possible to be realized with the help of decentralization of content delivery.”

One of the projects focused on creating a blockchain-based entertainment platform is BOLT, which provides cheap mobile video content to the emerging markets that are constrained by bandwidth, as well as to unbanked customers with no opportunity to use digital payment systems. BOLT is already available for streaming on the web and Android, and it’ll be soon on iOS too. The platform has several important features that allow users to bypass speed and price restrictions:

BOLT can stream HD video at 250MB per hour, which is 12 times better than what Netflix or Youtube offers. Its focus on mobile allows it to process streams in significantly smaller packet sizes.

The access to the library of content is provided on a transactional basis – users can choose to pay for 24 hours, a week, or a month. The price varies from $0.10 to $1 respectively.

Their platform has a wide ecosystem of partners, which include telcos for data bundling and direct carrier billing, content broadcasters, and potentially other media verticals such as gaming and education. The company already has agreements with the Discovery Network, AI Jazeera, ViKi Rakuten, Reuters, and has a growing base of live channels in the list of its partners.

In addition to that, BOLT has initiated “BOLT Originals” – an in-house content development programme. BOLT’s original content is communicating the company’s values and giving visibility to their users and people around the world. Dedicated teams are working on “BOLT Originals” to deliver such content on regular basis.

BOLT utility tokens are used to gain access to the services on the platform. Users can earn these tokens by participating in the community, for example, by publishing content or translating it. Ecosystem partners, on the other hand, are allowed to bill users with a single BOLT token instead of using a basket of fiat currencies.

Last but not least, BOLT will provide its wallet for users to receive, trade, store, and manage their BOLT credits as well as Bitcoin, Ethereum, and Zilliqa, which can be used in the BOLT ecosystem.

BOLT is expected to solve three main problems of emerging markets on their way to digital entertainment, as both streaming cost and speed requirements are significantly lower for BOLT’s solution, and services can be bought directly from the mobile phone with no need to have access to a bank account. Due to easy-to-use interfaces and BOLT’s wallet, users are not overwhelmed with the complexity of the underlying blockchain technology, also know as blockchain invisibility. There are still questions left open, however – whether BOLT will be able to attract valuable partners to offer good content, if customers will prefer BOLT over the free alternatives like Youtube, and if ecosystem participants will actively use tokens with a fiat currency option available.

Other interesting projects solving a similar problem include Theta and the NOIA Network. Theta is a blockchain and token dedicated to powering a decentralized video streaming and delivery network. Theta Tokens are used as an incentive to encourage individual users to share their redundant computing and bandwidth resources as caching nodes for video streams, which improves the quality of the stream delivery and reduces bandwidth costs. The company is targeting such applications as TV, movies, movies, esports, music, education, and enterprise conferencing.

NOIA is the content blockchain-based scaling network, which utilizes unused bandwidth and storage from hundreds of thousands of computers around the world to allow more efficient content delivery through local Internet networks. The solution is available to every website and application in the world and it cuts down a significant portion of expenses.

Conclusion

Surfing the web, streaming music, and watching videos online is an everyday activity for most of us. However, for emerging and developing countries, digital entertainment is not that easy – Internet speeds can be two or more times lower than the global average, the price of 1GB of data may be equal to the price of weekly rent, and digital payment options can be simply unapproachable due to people not having access to bank accounts.

The blockchain is a possible solution that could eliminate all the obstacles at the same time – decentralization will bring cheap and bandwidth-efficient entertainment online for everyone, including the unbanked.